Telenor Group Jon Fredrik Baksaas, CEO
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation contains statements regarding the future in connection with the Telenor Group’s growth initiatives, profit figures, outlook, strategies and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. 2
An adventurous year for Telenor August October May June 2G licence renewal in 3G licence secured in Data-centric pricing Telenor selected for final Grameenphone dtac introduced in licence negotiations in Scandinavia Myanmar October Novem ber April Altimo increased Secured new Telenor acquires ownership in spectrum in 6 circles Globul in Bulgaria VimpelCom to 48% in India August August 2 0 1 2 2 0 1 3 3
Growth and efficiency: Execution of strategy Internet for all Preferred by customers Efficient operator Targeting operating cash flow of NOK 28-30 bn in 2015 4 Operating cash flow defined as EBITDA before other items and capex excluding licence and spectrum fees
Positioning Telenor Norway for the future Revenues ( NOK bn) and EBI TDA m argin ( % ) • Significant investments in mobile and fibre networks 30 80,0 25.2 25.5 25.3 70,0 25 • Moving to data-centric pricing 60,0 20 50,0 15 39.6 41.5 43.7 40,0 • Building a future-proof operating model 30,0 10 20,0 • Targeting gross opex savings of NOK 5 10,0 2.0 bn in 2015 0 0,0 2011 2012 LTM EBI TDA and capex ( NOK bn) EBITDA CAPEX 11.0 10.8 10.0 4.3 4.1 3.7 2011 2012 LTM EBITDA margin before other items 5
Transition from concession to licence in Thailand Affordable 3G handsets • 2.1 GHz licence awarded in Oct 2012 • 3G services on 2.1 GHz launched in July ~USD 142 ~USD 80 • Targeting 80% population coverage on 3G within 3 years • Speed on transition to licence regime ~USD 40 depending on Concession Licence • 3G network coverage expansion Grantor CAT NBTC • 3G handset penetration Ownership of assets CAT dtac Annual regulatory 30% of service 5.25% of service cost revenue revenue
On track for cash flow break-even in India by end of 2013 On track for cash flow break-even in India by end of 2013 6 focus circles in India Operating cash flow (NOK m) Other circles 6 circles UP West 90 UP East Bihar Gujarat 123 139 -194 62 -221 -325 96 -406 Maharashtra Maharasht 86 ra -621 Andhra Pradesh -763 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Population (m) Organic growth assuming fixed currency, adjusted for acquisitions and disposals. 7 EBITDA and EBITDA margin before other items. Capex excl licence fees
Successful applicant for licence in Myanmar • Offered nationwide telecommunication licence • 900 MHz and 2100 MHz spectrum • 15 years licence duration • Technology neutral spectrum • Population of 60 million with less than 10% mobile penetration • Awaiting telecom law and final licence conditions 8
Priorities for capital allocation remain firm 1 Maintain a solid balance sheet Net debt/EBITDA below 2.0x 50-80% dividend payout of 2 Competitive shareholder remuneration normalised net income Aim for YoY growth in dividends Value driven, within core 3 Disciplined and selective M&A assets and regions 9
Healthy and competitive shareholder remuneration Dividend per share (NOK) Payout to shareholders (NOK bn) Dividends 6.00 Share buybacks 5.00 5 .3 3.80 4 .4 4 .7 2.50 9 .4 8 .0 6 .3 4 .1 2009 2010 2011 2012 2009 2010 2011 2012 • • Average YoY DPS growth of 34% in 1% buyback programme launched in 2010-2012 July 2013, 21% completed 10
Capital Markets Day 17 September 2013 Telenor Group’s head office at Fornebu 11
Thank you
Telenor Group 153 million consolidated mobile subscribers Revenues in 2012: NOK 102 bn (USD 18 bn) Market cap: NOK 200 bn (USD 34 bn) Europe Norway Sweden Asia Denmark Thailand Hungary Malaysia Serbia Bangladesh Montenegro VimpelCom Ltd. Globul Pakistan Telenor Group holds 33.0% economic and India 43.0% voting stake in VimpelCom Ltd. 13
Geographic split of key financials in 2012 Revenues EBITDA 8% 4% 25% 33% 43% 44% 23% 20% Norway Europe Asia Other Norway Europe Asia Other Operating cash flow 1% 33% 46% 20% Norway Europe Asia Other ”Other” includes Broadcast, Other Units/Group functions and eliminations 14
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